From start-up to scale-up: 6 lessons from 3 of the UK’s brightest businesses

Ella's Kitchen, The Cambridge Satchel Company and Naked Wines share their tips on turning a burgeoning company into a fast growth enterprise

Earlier this year Startups was given the opportunity to attend the Inspiring Entrepreneurs: Growing Pains and Gains event at the British Library, where an expert panel comprising of Ella’s Kitchen founder Paul Lindley, The Cambridge Satchel Company’s Julie Deane, and Naked Wine’s managing director Eamon FitzGerald discussed how to create and run a fast growth company.

Their business stories are what many start-up dreams are made of. All three overcame formidable barriers such as no finance, stolen designs, and introducing something revolutionary into a condensed and old-fashioned market to become some of the most inspirational businesses to have emerged from Britain in recent years.

Cambridge Satchel has grown organically from a company that started with just £600 to a global firm with a £13m turnover (the business also recently took on its first investment: £12.6m from Index Ventures). Startups Awards winner Naked Wines was acquired by rival group Majestic Wines for £70m. And finally Ella’s Kitchen, another Startups Award winner, has become a household name for every family in the UK and was acquired by the biggest health food company in the world.

Here, we’ve pulled together Lindley, Deane and FitzGerald’s six key lessons on how to create and manage a growing business…

Lesson 1: Ensure your business is better than all the rest

Fitzgerald opened on this, emphasising that companies must understand that in order to succeed you need to ensure that what your business is selling is better than your competition.

This requires start-ups to study other firms in their space, understanding what they’re doing and what their strengths and weaknesses are. This will also help a new company recognise its unique selling point (USP), where its own strengths and weaknesses lie, what to focus on improving and how to target its proposed market.

Lindley also emphasised this, advising companies to be “consumer obsessed” when developing a product. Ella’s Kitchen’s product development started by looking at its target customer base to see what was missing and what issues consumers encountered in the current market. Lindley recommends looking for “the stress to see where you can change that […] we’ve kept to that relentlessly; listening to our customers and integrating and shaping towards them.”

A great product or service will also get your business noticed and help it to gain traction, Deane stresses that because her product was an example of excellent craftsmanship and quality materials it got recognition from fashion bloggers, celebrities and designers on merit alone.

Lesson 2: ‘Fake it ‘til you make it’: Price your product as though you’re a big business

Often start-up’s struggle to compete with larger companies as big businesses have the resources to reduce their prices by absorbing a lot of the work involved in business. However, small businesses can find ways to match this by looking at what is actually necessary for their start-up to run; Naked Wines for instance removed marketing, distribution, and promotion by creating a network of customers or ‘Angels’ through its online platform.

Cambridge Satchel had a similar approach to spending, believing in the bootstrapped approach. Deane admits that now that her company can afford it, she employs experts for jobs like website design and overseas distribution; but as the business was growing, she did much of the work herself (from building the first website to sourcing a warehouse) and let nothing hold her business’ growth back. Deane was also conscious not to be intimidated by obstacles that initially seemed too large to surmount. Taking exporting as an example she admitted she tried to just view it as “different addresses on the parcel.”

All three emphasised the importance of a decent profit margin, to allow for investment in quality and growth.

Lesson 3: Treat your best customers well

As your business grows, it can be difficult to manage the influx of new clients and to maintain the high levels of customer service you prided yourself on with your first few customers. Although it is important to grow your customer base and attract new customers, it is vital that you do this in a balanced way and not at the cost of your longstanding supporters.

As Naked Wines’ growth and customer base accelerated, a number of the company’s long-term consumers became frustrated as they were no longer able to get their favourite wines. At this point the business was letting new customers pick any of the wines listed; however after listening to feedback (and turning the negative criticism into a positive action) it launched a waiting list.

This meant that new customers could buy a case of wine but if they wanted to become a Naked Wines ‘Angel’ they had to wait. This proved to be a great tactic for the company as it resulted in rewarding the people who were loyal, strengthening its consumer base as well as embedding long-term reliability amongst customers.

Lesson 4: Don’t be afraid to collaborate in business

Whether it’s a mentor, business partner or investor; having another perspective in your business can be a key ingredient to success. For Cambridge Satchel, partnering with top brands and designers has helped the business reinvent itself, stay original and gain more notice and recognition in the fashion world.

Collaboration can introduce you to a wider audience, help your business become more creative and enable you to streamline processes; additionally it can give you another perspective on important decisions like investment, market expansion and product change. It’s important in business to know when to share your workload – no matter how daunting that may seem for new entrepreneurs.

Lesson 5: Invest in talent, not sales

This is another concept championed by the three leaders, with all asserting that this is one of the most fundamental aspects of any successful business.

Any money you can save by cutting out unnecessary spending, put it into the people you hire. A great team is core to any start-up’s success as they will build the great product, offer the fantastic service and contribute to the creation of a brand that people will come back to.

Lindley reinstates that a business’ success is routed in both you and your employees. Business is all about the people: their experience, loyalty, ability to perform, and passion for the company. Executing your company’s ideas involves getting a dedicated team. The founder says that to create and keep this type of business team, you have to treat your staff as individuals, keeping everyone involved in the business and rewarding employees in a way that matters to them.

Lesson 6: Establish a cause and build a fan base around it

All three former start-ups were launched with a worthy goal; from wanting to create a timeless and beautiful product, to making kids’ (and parents’) lives and diets better, to connecting talented and struggling winemakers to a wider market – and these missions shaped their business’ growth.

Lindley says that he wrote down how he wanted the business to operate from day one, basing Ella’s Kitchen’s five fundamental values on this. Every business decision from then on was shaped by these foundations. The entrepreneur stresses that focusing on something more than growth also helps to attract the right talent as the company will draw people that care about these principles and therefore will be passionate about the business.

Having a cause will encourage customers to your brand too, according to FitzGerald “people buy not what you do but why you do it” and having an enterprise that stands for something worthwhile will automatically mean an army of followers who are passionate about the business and who will help you maintain it. Finally, Lindley underscores that ethics are especially relevant in today’s business world because of the way the internet and social platforms have shaped it, making transparency and being distinctive all the more important – as Lindley says “businesses that are good are businesses that are better.”

For other tips and guides on doing business from successful entrepreneurs, check out our How They Grew channel.

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